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"Broadband costs, network costs, national calls... We are being
held to ransom," complains the chief information officer of one
major corporate. "They are bloody hopeless," continues the IT
manager of another.

Choice words these, and they are directed at Telecom. And these
views emerge as MIS talks to a group of IT executives on issues
that affect them most, and in which they feel government policies
will have an impact.

Telecommunications, and more specifically Telecom, the principal
supplier of telecommunications services in the country - a
monopolist to its critics - top the list. Software
licensing, involving another monopolist - Microsoft -
is an issue raised by public sector CIOs. But there is one issue
that resonates with both private and public sector CIOs - the
difficulty of finding and maintaining skilled staff.

The IT executives quoted cover a range of public and private
sector organisations, but fearful of possible ramifications, some
declined to be identified. The IT head of one major retailer noted
his firms contracts with government, while government
department CIOs typically cited civil service neutrality, so they
did not take part.

Nonetheless, many of the executives were forthright with their
views, in case political parties would listen and respond. After
all, they have experienced business conditions under both Labour
and National governments. Some IT leaders demand more government
action, either to impose competition or ensure things
are provided, while others call for less interference.

Assessing current initiatives Labour initiatives in recent years
include the Digital Strategy and Project Probe to increase
broadband access, but local loop unbundling has yet to happen and
much needs to be done to achieve the goals of the "knowledge
economy".

"However, the ability to actually get things to happen is of
concern. Project Probe has provided some much needed impetus in the
rural and regional areas, but the vision has been set too low. Our
schools should have much more bandwidth than can be made available
through yesterdays technologies such as ADSL," says
James.

Phil Brimacombe, chief information officer of Auckland-based
healthAlliance, says while the government has promoted Project
Probe as a national broadband solution, "Down at the coalface, GPs
and DHBs have struggled to rapidly implement affordable and
practical connectivity."

This brings us to Telecom New Zealand, their major bugbear,
local loop unbundling and the lack of sufficient and affordable
broadband.

Telco traumas
Even on the record, IT executives were direct on their views about
Telecom, which has just reported a sharp increase in profits close
to a quarter of revenues. While that might have pleased the finance
markets, such "price gouging" as one IT director puts it, only
fuels the anger of many.

Otago Universitys James accuses Telecom of "creaming off
as much as they can while the going is good in the duopoly
situation".

"Telecommunications technology has delivered dramatically
lowered costs of provisioning, but these savings have certainly not
translated into appropriately lower charges for the end user,"
James continues.

The local loop should have been unbundled at the time of the
sale, he says, but this issue is becoming less relevant as
alternatives become available, though it should still happen. The
Telecom Service Obligation also needs to be reviewed.

"Providing services in rural areas should be guaranteed by the
government tendering out the opportunity to provide services, and
covering the shortfall directly. This would be a much more
transparent process," he says.

James also alleges high costs for international connections (for
data services) despite Telecom NZs half-share of the main
trans-Pacific (Southern Cross) cable. Research institutes in Fiji
and Australia gain good access to it, while New Zealand misses out,
he says.

Government, he adds, needs to ensure affordable bandwidth is
available, claiming Kiwi businesses are already losing trade
because of its high costs.

"There needs to be a structural separation in the
telecommunications area. The underlying infrastructure, the ducting
and the fibre should be viewed as must of us view roads - as part
of the infrastructure for the whole of society. The market for
services should be built above this.

"Telecom should get 10 out of 10 for the way they play the game
as the rules are set, governments should get two out of 10 for
their setting of the rules and Telecom should get one out of 10 as
a good organisation for New Zealand," James concludes.

Andre Snoxall, out-going general manager of HealthIntelligence
in Wellington, says at least the current government recognises
issues around things like developing a sound broadband
infrastructure but initiatives seem to be too little, too late.

"Bandwidth is a great enabler but the market is controlled,
managed and manipulated by three players in New Zealand (Telecom,
TesltraClear, Vodafone) who clearly do not have the best interests
of the host country at heart; and who only wish to extend the life
of and wring the very last drops of profit from the antique
communications infrastructure they have in place," Snoxall
continues.

"This must be brought to a close," he says. "Again, no one who
is a shareholder can blame the big incumbents from maximising
shareholder value, but someone and it is usually government, needs
to impose a social conscience or at least a cost of not having a
social conscience on the incumbent providers of bandwidth in New
Zealand."

"My experience of Telecom is that they are only truly customer
orientated when there is a genuine possibility their customer is
about to go with the opposition," says Brimacombe.

Valerie Fogg, information services director at Simpson Grierson,
says: "Talking to my colleagues in Australia, they have the ability
to negotiate terms and conditions that we dont have
here."

One CIO who prefers to remain anonymous says that Telecom is
"lethargic, protected, cumbersome, frustrating and
obfuscating".

Another says: "It wasnt a mistake to privatise but Telecom
are very process orientated. If you want to do anything thats
different to the process, then forget it. It is really
difficult."

Telecom, however, gets a positive mark from Walter Chieng, IT
manager at St Kentigern College, who says he gets "reasonable
deals" from the company.

An eye for open source
Phil Brimacombe, whose healthAlliance is running trials in open
source, says Microsofts costs are very significant to the
public sector and taxpayer and the government is missing huge
opportunities in not promoting open source as a viable alternative.
Government agreements with Microsoft do not provide sufficient
flexibility and options for the health sector and he doubts this
will be solved in the G2006 talks.

"Microsoft is an unfortunate fact of life," continues Neil
James. "Without almost dictatorial central government control I
dont believe it is feasible to avoid Microsoft.

Essentially, most countries now have a tax levied by
Microsoft. Microsoft has held back innovation from the 1990s
onwards, just as IBM held innovation back through their dominance
in the 1960s and 1970s," he continues.

However, as a G2006 negotiator, Steve Mayo-Smith, Auckland
District Health Board chief information officer, says the
government is becoming more organised to ensure New Zealand is "not
captured" by the vendor.

"We also deal about value not just cost. Its about open,
published standards, whereas other systems are proprietary and lock
you in. Cost is a red herring. The true benefits are in having
choice," he adds.

Andre Snoxall, largely agrees but sees little difference between
the two. "There is nothing any less proprietary about one platform
than another and probably bugger all difference in the total cost
of implementing and maintaining them properly and well.

Both or all are dominated by interests that wish to control and
restrict and minimise choice and maximise return on their
investments. If CIOs have nothing more valuable to worry about than
what they are paying for a platform, rather than what value they
are helping their business to drive from it, then need I say more?"
he concludes.

Pat OConnell, chief information officer of Carter Holt
Harvey, says while some organisations want open source, others
"prefer the protection of a substantial entity behind
what is more and more critical - i.e. office products!"

IT bosses call for some government support for locally-made
software, but notice its limits.

"Unfortunately, branding and the sales efforts tends to be much
more important than the quality of the product. While New Zealand
can expect to continue in niche markets for software products, the
large multinational will continue to dominate the infrastructure
end of the market," says James.

One IT director who declined to be named doubts the ability of
government to lead on software policy, but adds adding
larger tax write-offs for his own firms in-house development
would be welcome.

Phil Brimacombe also notes government action on software
development has sometimes had a reverse effect than intended,
citing the creation of a cluster of health software producers,
Overseas companies join the cluster, offer incentives for the local
firms to partner with them, often gobbling them up, taking the jobs
offshore and then reducing competition.

"This is a major concern for me as the overseas vendors have
little interest in changing their systems to suit local
requirements," adds Brimacombe.

Brain drain blues
Government initiatives to build up a local industry, attract and
develop IT skills, curb the brain drain has met similar
challenges.

"My biggest issues were the ability to recruit really good
professional ICT personnel in New Zealand. There is an enormous
issue of supply and demand. I suspect some sort of a brain drain is
a result of the existing student loan scheme coupled with the
opportunities available overseas," continues Andre Snoxall.

"New Zealands idyllic lifestyle and greener
than green image is oversold and overestimated as a source of
competitive advantage and I think New Zealand needs to continue to
focus its efforts on understanding how it can support innovation
and incubate ideas, research and a brain pool that is second to
none.

"There should be a massive and ongoing investment in enabling
technologies and centres of excellence. There should be a focus on
developing tax regimes that support innovation, technological and
entrepreneurial activities such as those in Finland, Ireland and
Malaysia," says Snoxall.

"Government policy is not effective enough in getting people
attracted enough into IT and IT training. We still have enormous
difficulty in recruiting people into specialist and technical
roles. This is partly because the public sector struggles to
compete with IT vendor salaries but also because good quality
candidates are just few and far between. We have key projects being
held up because of the lack of skilled staff," continues
Brimacombe.

"Generally, we have struggled to attract the right people," adds
Steve Mayo-Smith of the Auckland District Health Board.

"We will always be competing with the younger staff going to the
UK for their OE. It is important to attract people to New Zealand
and offer incentives, otherwise the shortage will continue," says
Mayo-Smith, who came to New Zealand from Bath, England, for the
lifestyle.

Valerie Fogg says better wages abroad are driving people
overseas, creating skills shortages, and government needs to come
up with something to attract people and new businesses.

"Perhaps more subsidies to assist these businesses to get them
up and running. There are schemes, but they are minimal," says
Fogg.

James says good, cheap communications would help the country
attract and keep young people as they see these as a "must
have".

For OConnell, the issue sums up his view on the role of
government. "Apart from some obvious needs in the telco
deregulation area, I dont think government has a huge area to
play, except with the exception of encouragement," he says.

"If we are to be serious about a knowledge economy and wish to
foster a technology wave, then we need to do more than talking it
up and wishing it into existence. We need to be practical about the
steps we take - incentives, targeted immigration, specialisation,
etc," OConnell concludes.

James says there is little between Labour and National and they
are wrong in believing "the market will provide". He wants the
government to make strategic decisions and intervene to "advantage
New Zealand" in terms of innovation.

For Mayo-Smith, the biggest challenge for health is funding.
"Government needs to start leading and driving more change and go
for a greater consistency through-out the country. A lot of where
the drive comes from is the government bodies. Party labels
dont mean anything," he adds.